Pacific Mut. Life Ins. Co. v. Hayes

• Decision Date: 16 January 1919
• Docket Number: 8 Div. 83
• Citation: 202 Ala. 450,80 So. 834
• Parties: PACIFIC MUT. LIFE INS. CO. v. HAYES.
• Court: Alabama Supreme Court

80 So. 834

202 Ala. 450

PACIFIC MUT. LIFE INS. CO. v. HAYES.

8 Div. 83

Supreme Court of Alabama

January 16, 1919

Rehearing Denied Feb. 6, 1919

Appeal from Circuit Court, Morgan County; Robert C. Brickell, Judge.

Action by Mrs. E.M. Hayes against the Pacific Mutual Life Insurance Company.Judgment for plaintiff, and defendant appeals.Affirmed.

E.W Godbey, of Decatur, for appellant.

W.T Lowe and Callahan & Harris, all of Decatur, for appellee.

This cause was submitted and considered under rule 46(65 South vii);the opinion of the court being delivered by Mr. Justice THOMAS.

This is the second appeal.The suit was on a policy of life insurance issued March 9, 1911.Upon the last trial the matter embodied in the charge on which the former reversal (76 So. 12) rested was given, together with other charges of like effect.The verdict was for plaintiff.The pleading and evidence were substantially the same on the two trials.

On this appeal the important question presented is whether there was error in declining defendant's request for the affirmative charge.

Of the question of good faith on Mrs. Hayes' part in making payment of the premium after default, appellee's counsel aptly observes the payment was made on October 17, 1913, while the assured was away from home at work, "where he had been for two weeks and four days" before he returned to her home, and at a time when, if he was sick, it was not known or supposed by any one concerned.The payment was to Penney & Whitman, as defendant's agents, who, when the same was accepted by them, knew the premium was in default and remitted the same by Lamar Penney's check to Fitts & Son.The check was not returned to Penney or to his firm or any member thereof; it recited that it was "for A.J. Maynor's life prem.," and the accompanying letter was to like effect.

If the authority of Penney & Whitman, or either of them, was that they were entitled to receive payment from Mrs. Hayes of the defaulting premium, the knowledge of such agents of insured's default as to the accrued premium was that of defendant, and, if so, such agent's acceptance of the premium was a waiver of the forfeiture.Mr. Chief Justice Anderson observed in United States Health & Accident Ins. Co. v. Goin,197 Ala. 584, 588, 73 So. 117, 118:

"The proof showed that Williams was the defendant's district manager, and that he received the premiums, wrote applications, and adjusted and settled losses.'The business of an insurance company is, of necessity, carried on by its officers and agents.The company and its agents and officers are, in law, one and the same as to all transactions within the scope of the authority of the officers and agents, and their acts are imputable to the company.As a general proposition, it may be said that knowledge of an agent of an insurance company, as to matters within the general scope of his authority, is the knowledge of the company, and it is bound thereby.'Cooley's Briefs on Insurance, vol. 3, p. 2520."

There was evidence in the instant case from which the jury might infer that Penney & Whitman, as district agents for defendant, not only received payments of premiums maturing on policies in their district, but that the first and second, as well as the third premiums on instant policy, were so paid through them; that they took applications for insurance, and effectuated renewals of defaulting policies for the company within the district where Mrs. Hayes lived and paid the premium in question.The cases were collected, to support the statement that the disputed question of authority of an agent to receive the notice of, or to waive, a breach of the contract provisions of a policy of fire insurance is for the jury, in Southern States F.I. Co. v. Kronenberg,74 So. 63, 66.In that case it is further observed, of the powers of a general agent, that such power was prima facie coextensive with the business intrusted to his care, and that such agent was authorized to act for the principal in all matters coming within the usual and ordinary scope and character of the conduct of such business; that the apparent authority of such agent cannot be narrowed by secret instructions and limitations from the principal unless the third party dealing with such agent has notice thereof.

This record shows that E.D. Whitman, of the firm of Penney & Whitman, was, in compliance with the statute, commissioned by the secretary of state of Alabama agent of the Pacific Mutual Life Insurance Company, authorized to transact the business of life, health, and accident insurance for said company, on January 6, 1911, for the remainder of the year; that like commissions duly issued by that state official to Lamar Penney of said firm to do, or authority to conduct for defendant, the business of insurance for the years 1911, 1912, and 1913, the respective latter dates of issuance of such commission being January 19, 1912, and February 10, 1913.One phase of the evidence further tended to show the defendant paid to the secretary of state, or insurance commissioner, the usual fees for such agent's commission that issued to Penney and Whitman of said firm (of Penney & Whitman) to transact its business of insurance in the state of Alabama.Defendant, however, insists that said agency was only for and at the instance of W.F. Fitts & Son as general agents of defendant.In Sun Ins. Office of London v. Mitchell,186 Ala. 420, 426, 65 So. 143, Mr. Justice Somerville declared of the certificate of the secretary of state issued to one Myers, as the agent of defendant, that it prima facie established the general agency of Myers for the defendant company and authorized such agent to transact the insurance business indicated in the certificate in the state of Alabama; that an agent who is authorized to solicit and receive applications for fire insurance intrusted to him by the company for that purpose must be regarded quoad hoc as the general agent of the company, and third persons without notice of the limitation of the authority of said agent, as to such persons, said general agent's authority must be determined by the nature of the business and is prima facie coextensive with its requirements.

The contract of agency of Penney & Whitman with Fitts & Son recited that it was "for the purpose of procuring and transmitting applications from individuals for insurance in the Pacific Mutual Life Insurance Company of California, delivering life and endowment policies, collecting and paying over to the general agent premiums on the insurance so effected, and performing such other duties as may be required by the general agent, all in accordance with the rules of the company and the methods of conducting business which are now in force or which may hereafter be given or adopted by the company or general agent"; the agent would devote his entire time, talents, and energies to the business.In addition to the schedule of commissions allowed to agents, it was further agreed:

"That in the event the said Lamar Penney and E.D. Whitman shall produce and pay for not less than fifty thousand dollars in life insurance exclusive of term insurance during any calendar year under this contract, and shall be actively engaged under this contract according to its terms and provisions they shall receive a renewal commission of ten per cent. (10%) of the second annual premiums paid on all whole life, twenty payment life and twenty year endowment policies produced during said calendar year."

Without more, under defendant's approved agency contract, the agent's authority was prescribed in part in writing and rested partly in parol; that is, as to the performance of such duties as may be required of them "all in accordance with the rules of the company and the methods of conducting business which are now in force, or which may hereafter be given or adopted either by the company or general agent."Thus the instant case is brought within the principle, where the authority of the agent is in dispute and rests in parol, or is to be inferred from the conduct of the principal, the jury must determine that authority and to that end may consider the acts and declarations of the agent.Roberts & Son v. Williams,73 So. 502;Southern States Fire Ins. Co. v. Kronenberg, supra;United States Life Insurance Co. v. Lesser,126 Ala. 568, 587, 28 So. 646.

The agency contract of Fitts & Son with defendant company contained sections 19and20, as follows:

"This contract is strictly confidential, and in case the agent shall mention or exhibit the terms thereof to any person or persons, he shall forfeit all benefits hereunder.

"All contracts with subagents shall be executed in triplicate, immediately forwarded to the company, and shall be subject to its approval."

From this, it is clear that, under the agency contract of Fitts &amp Son with defendant, the former were authorized to appoint as agents Penney or Whitman, and it was further required that such agency contract be executed in triplicate and immediately forwarded to the company, and was dependent on that company's approval.The appointment of Penney & Whitman as subagents, afterwards enlarged to district agents, was ratified and approved by the company.Mr. Whitman testified that his firm had circulars from the company in regard to handling campaigns for insurance; that he or his firm would notify the company what parties borrowing money on policies had to say as to payments, etc., acknowledged receipt of the company's letters to him or his firm, signing their names as agents, and sent communications...